Emergent Research

EMERGENT RESEARCH is focused on better understanding the small business sector of the US and global economy.

Authors

The authors are Steve King and Carolyn Ockels. Steve and Carolyn are partners at Emergent Research and Senior Fellows at the Society for New Communications Research. Carolyn is leading the coworking study and Steve is a member of the project team.

Videos

Disclosure Policy

Emergent Research works with corporate, government and non-profit clients. When we reference organizations that have provided us funding in the last year we will note it.
If we mention a product or service that we received for free or other considerations, we will note it.

After discovering tagging penguins with bands around their flippers was harmful—it impaired their survival and the number of their offspring, presumably by reducing their speed in the water - scientists switched to implanted RFID tags.

This presented the challenge of getting close enough to the penguins to read the tags - a distance of roughly 2 feet - without disturbing them. The solution was robot penguins, which can maneuver around penguin colonies without attracting a lot of attention.

February 24, 2015

Over the past month or so there's been a crescendo of negative press on the sharing economy, with sharing economy jobs being the primary target.

The negative press tends to focus on Uber, which has established itself as the company everyone - except Uber users - hates due to their rough and tumble business practices.

Adding to the negative press is a growing litany of complaints by sharing economy "providers", which is the industry's term for their workers. The vast majority of providers are independent contractors.

1. Supporters say the sharing economy not only provides good jobs that pay well, but also provides flexible work schedules and the ability for providers to become entrepreneurs and own their businesses.

2. Critics say the sharing economy is creating a new class of serfs - poorly paid workers with few rights, benefits or legal protections.

So who's right?

Both or neither, depending on how you look at it.

In our interviews, surveys and focus groups independent workers almost always describe what we call the yin and yang- or two sides - of independent work (freelancing, self-employment, etc.).

Independent workers tell us they love the autonomy, control and flexibility working independently provides. At the same time, they tell us they are challenged by the stress, uncertainty and insecurity associated with independent work.

For most independent workers, the good outweighs the bad and the majority report they prefer being independent. In other works, they like their work, think of themselves as having a "good job" and prefer being independent over having a traditional job.

But our research also shows a sizable minority of independent workers don't like being independent. These people don't like their work, think they have a "bad job" and would prefer traditional employment.

The key factor indicating whether or not someone prefers independent work is how much work autonomy, control and flexibility they believe they have.

Independents reporting being happy with their levels of work autonomy, control and flexibility generally report being highly satisfied with being an independent worker.

Those reporting being unhappy with these, generally report not being satisfied.

This makes sense. These folks have the worst of both types of employment. They don't have the autonomy, control or flexibility that makes independent work attractive - nor do they have the job security, benefits or legal protections associated with a traditional job.

So in terms of the overall independent worker segment, both points of view - good and bad - are valid. But both of these points of view are incomplete.

The more nuanced and accurate view is independent work is both good for most and bad for many. This view rarely shows up in the media.

We've started diving deeper on sharing economy jobs and so far we're seeing the same pattern. Most of the providers we interviewed or surveyed like their sharing economy jobs, but a large minority don't.

And consistent with the broader independent worker segment, the key attribute is the amount of autonomy, control and flexibility providers have.

We will report our more detailed findings on this sector as they become available.

For those interested in more details on the yin and yang of independent work, the Job Makers Versus Task Takers section of the 2013 MBO State of Independence report covers this in more depth.

... take on new roles as consultants and advisors, providing performance management, decision support, IT advice and similar services, with less emphasis on nuts-and-bolts functions such as computation and tax preparation.

Barlow's research shows they are well positioned as trusted advisors, making this shift easier.

February 17, 2015

BI Intelligence, the research arm of new site Business Insider, has an excellent report on PayPal and Square's activities in the small business lending space.

Their report - The Small Business Lending Opportunity - requires a paid subscription. But they don't seem to mind if I publish a couple of their charts, especially if I mention how much I like their service (it's great) and how cheap it is ($495 a year).

The small business lending opportunity discussed in the report is due to a steep decline in bank lending to small businesses, especially businesses with less than $1 million in sales.

According to the report, this is due to "Financial institutions' stricter lending requirements". This, coupled with higher regulatory compliance costs, means small loans are not profitable enough for many banks to bother with.

In response, non-banks have moved into this space and are having a fair amount of success. The chart below shows the rapid growth in lending volume by PayPal and Square.

Non-banks, because they have less regulatory oversight and compliance requirements, are able to serve this market profitably.

Having said that, non-bank sources of money aren't always cheap. This is illustrated in the chart below which shows PayPal's merchant advances have a 25% effective interest rate.

Small businesses looking for loans, and especially merchant advances against sales, should look at the services provided by PayPal, Square and others.

Money is available, lending requirements less strict than with banks and the application process quick and easy. Just be aware of the costs.

Expect many more non-banks to enter the financial services industry in the coming years. The financial services is simply too big and too encumbered by regulations for this not to happen.

The most dramatic space, the former second-floor banking hall, has been returned to its original two-story grandeur with the elimination of a dropped ceiling and the restoration of its richly ornamented plaster ceiling. But the room, now part of a suite called the Commons Bar, is no stodgy museum piece. It has a new kick, courtesy of a towering, oval-shaped bar clad in zinc, red leather and mirrors. Throughout, outlets are ubiquitous, appealing to tech-savvy travelers.

Virgin joins Marriot, Ace and a number of other hotel chains and operators who are adding coworking-like spaces to their properties.